Adjusting Entries

1. Pappy Corporation received cash of P13,500 on September 1, 2022 for one year’s rent in
advance and recorded the transaction with a credit to Unearned Rent. The December 31, 2022
adjusting entry is.

2. Lopez Company received P6,400 on April 1, 2022 for one year's rent in advance and
recorded the transaction with a credit to a nominal account. The December 31, 2022 adjusting
entry is.

3. Gibson Company paid P3,600 on June 1, 2022 for a two-year insurance policy and recorded
the entire amount as Insurance Expense. The December 31, 2022 adjusting entry is.

4. Tate Company purchased equipment on November 1, 2022 and gave a 3-month, 9% note
with a face value of P20,000. The December 31, 2022 adjusting entry is.

5. Brown Company's account balances at December 31, 2022 for Accounts Receivable and the
related Allowance for Doubtful Accounts are P460,000 debit and P700 credit, respectively. From
an aging of accounts receivable, it is estimated that P12,500 of the December 31 receivables
will be uncollectible. The necessary adjusting entry would include a credit to the allowance
account for.

6. Chen Company's account balances at December 31, 2022 for Accounts Receivable and the
Allowance for Doubtful Accounts are P320,000 debit and P600 credit. Sales during 2022 were
P900,000. It is estimated that 1% of sales will be uncollectible. The adjusting entry would
include a credit to the allowance account for.

7. Starr Corporation loaned P90,000 to another corporation on December 1, 2022 and received
a 3-month, 8% interest-bearing note with a face value of P90,000. What adjusting entry should
Starr make on December 31, 2022?

8. The income statement of Dolan Corporation for 2022 included the following items:
Interest revenue P65,500
Salaries expense 85,000
Insurance expense 7,600
The following balances have been excerpted from Dolan Corporation's balance sheets:
Accrued Interest Accrued Salaries Prepaid Insurance
December 31, 2022 9,100 8,900 1,100
December 31, 2021 7,500 4,200 1,500
The cash received for interest during 2022 was.

9. The income statement of Dolan Corporation for 2022 included the following items:
Interest revenue P65,500
Salaries expense 85,000
Insurance expense 7,600
The following balances have been excerpted from Dolan Corporation's balance sheets:
Accrued Interest Accrued Salaries Prepaid Insurance
December 31, 2022 9,100 8,900 1,100
December 31, 2021 7,500 4,200 1,500
The cash paid for salaries during 2022 was.

10. The income statement of Dolan Corporation for 2022 included the following items:
Interest revenue P65,500
Salaries expense 85,000
Insurance expense 7,600
The following balances have been excerpted from Dolan Corporation's balance sheets:
Accrued Interest Accrued Salaries Prepaid Insurance
December 31, 2022 9,100 8,900 1,100
December 31, 2021 7,500 4,200 1,500
The cash paid for insurance premiums during 2022 was.

11. Panda Corporation paid cash of P18,000 on June 1, 2022 for one year’s rent in advance
and recorded the transaction with a debit to Prepaid Rent. The December 31, 2022 adjusting
entry is.

12. The records for Kiley Company showed the following for 2022:
Jan. 1 Dec. 31
Unearned revenue P1,600 P2,160
Accrued revenue 1,260 920
Cash collected during the year for revenue, P70,000. The total amount of revenue is.

13. Prepaid rent at 1/1/22 was P9,000. During 2022 rent payments of P120,000 were made and
charged to "rent expense." The 2022 income statement shows as a general expense the item
"rent expense" in the amount of P125,000. Accrued rent expense is.

14. Interest receivable at 1/1/22 was P1,000. During 2022 cash received from debtors for
interest on outstanding notes receivable amounted to P5,000. The 2022 income statement
showed interest revenue in the amount of P5,400. Accrued interest income is.

15. The supplies inventory on August 1, 2021 was P7,350. Supplies costing P20,150 were
acquired during the year and charged to the supplies inventory. A count on July 31, 2022
indicated supplies on hand of P8,810. Supplies expense is.

16. On March 1, P12,000 was collected as rent for one year and a nominal account was
credited. On July 31, 2022, unearned revenue balance is.
17. Accumulated depreciation—equipment at 1/1/22 was P230,000. At 12/31/22 the balance of
the account was P270,000. During 2022, one piece of equipment was sold. The equipment had
an original cost of P40,000 and was 3/4 depreciated when sold. Depreciation expense is.

18. Rent of P12,000 for six months for a portion of the building was received on November 1,
2022. On December 31, 2022, balance of unearned rent is.

19. An insurance policy for two years was acquired on April 1, 2022 for P8,000. On December
31, 2022, balance of prepaid insurance is.

20. The records for Todd Inc. showed the following for 2022:
Jan. 1 Dec. 31
Accrued expenses P1,800 P2,150
Prepaid expenses 720 870
Cash paid during the year for expenses, P42,500. The total amount of expense is.

21. The company’s ending balance of accounts receivable is P150,000 and the company
estimated 10% to be uncollectible on the basis of the ending balance of receivable. Determine
the net realizable value of accounts receivable if the beginning balance of allowance for
uncollectible accounts is P5,000.

22. The equipment costing 840,000 has a useful life of 15 years with no salvage value.
(Straight-line method being used.) At year end, December 31, 2022, the carrying value of the
equipment is.

23. The rent payment of P150,000 covered the six months from November 30, 2022 through
May 31, 2023. Rent expense is.

24. The company’s ending balance of accounts receivable is P150,000 and the company
estimated 1% to be uncollectible on the basis of net sales (P1,500,000). Determine the ending
balance of the allowance for doubtful accounts if the beginning balance of allowance for
uncollectible accounts is P5,000.

25. On April 30, a ten-month, 9% note for P20,000 was received from a customer. On July 31,
2022, interest revenue is.

26. Sales salaries paid during 2022 were P60,000. Advances to salesmen were P1,100 on
January 1, 2022, and P800 on December 31, 2022. Sales salaries accrued were P1,360 on
January 1, 2022, and P1,380 on December 31, 2022. Show the computation of sales salaries
on an accrual basis for 2022.

27. Cowboy and Alien has acquired a printing machine worth 500,000 on September 1, 2020.
The machine has an estimated life of 5 years with a scrap value of 1/10 of its acquisition cost at
the end of its serviceable life. The carrying value of the printing machine on December 31, 2022
is.

28. A 50,000 7%, 360-day note was received from a client dated October 1, 20x1. The interest
was not yet collected at the end of the accounting period. The recipient of the note shall record
the adjustment with a debit to interest receivable of.

29. The supplies inventory account balance at the beginning of the period was P66,000.
Supplies totaling P128,250 were purchased during the period and debited to supplies inventory.
A physical count shows P38,250 of supplies inventory at the end of the period. The year-end
adjusting entry is.

30. A 120,000, 6%, 120 – day note was issued as payment for the supplies inventory
purchased. The note was dated November 20, 20x1. Payment of such interest was not yet
made. If the issuer prepares financial statements every December 31, each year, interest
expense pertaining to the note shall be presented at what amount? Use 360-day a year.

31. Bagaipo Company reported an allowance for doubtful accounts of P12,000 (credit) at
December 31, 20X2 before performing an aging of accounts receivable. As a result of the aging,
Bagaipo Company determined that an estimated P20,000 of the December 31, 20X2 accounts
receivable would prove uncollectible. The adjusting entry at December 31, 20X2 would be.

32. Antipuesto Company purchase equipment on November 1, 20X2 and gave a 12-month, 9%
note with a face value of P480,000. The December 31, 20X2 adjusting entry is.

33. Furniture and fixtures was acquired on March 31, 20X1 with an estimated life of 5 years and
with scrap value of 5,000 at the end of its life. Straight-line method is used for depreciation. If
the carrying value of the furniture and fixtures on December 31, 20x3 isP117,500, how much
was its cost when acquired?

34. Signed an advertising contract on December 1, 20X1 with a radio station for 3,500. The
contract will commence upon payment on December 15, 20X1 and will terminate on January 15,
20X2. Expense method is used in recording prepayment. On December 31, 20X1, adjusting
entry shall include a debit to advertising expense of.

35. Received cash from of 72,000 for a three-year advance rental to commence September 30,
2020. Rental income account was credited from receipt of cash. Reporting period falls every
December 31 each year. By the end of December 31, 2022, unearned rental income shall be
presented at what amount?

36. Amar Company received P96,000 on April 1, 20X2 for one year’s rent in advance and
recorded the transaction with a credit to a nominal account. The December 31, 20X2 adjusting
entry is.
37. Astillo Company loaned P300,000 to another company on December 1, 20X2 and received
a 3-month, 15%, interest-bearing note with a face value of P300,000. What adjusting entry
should Astillo Company make on December 31, 20X2?

38. On December 31, 20X2, Asilo Company’s bookkeeper made an adjusting entry debiting
supplies expense and credit supplies inventory for P12,600. The supplies inventory accounts
had a P15,300 debit balance on December 31, 20X1. The December 31, 20X2 balance sheet
showed supplies inventory of P11,400. Only one purchase of supplies was made during the
month, on account. The entry for that purchase was.

39. Salaries of 10 employees from the period Dec. 29, 2021 – January 3, 2022 at P362.50/ day
will be paid Jan 3, 2022. January 1, 2022 is a national holiday. Determine the accrued salaried
expense by December 31, 2021.

40. Andoy Company paid P72,000 on June 1, 20X2 for a two-year insurance policy and
recorded the entire amount as insurance expense. The December 31, 20X2 adjusting entry is.

41. Received cash from of 72,000 for a three-year advance rental to commence September 30,
2020. Unearned rental account was credited from receipt of cash. Reporting period falls every
December 31 each year. By the end of December 31, 2021, rental income to be shown in its
income statement shall be.
ANSWERS

1. debit Unearned Rent and credit Rent Revenue, P4,500

2. debit Rent Revenue and credit Unearned Rent, P1,600
3. debit Prepaid Insurance and credit Insurance Expense, P2,550
4. debit Interest Expense and credit Interest Payable, P300
5. P11,800
6. P9,000
7. Debit Interest Receivable and credit Interest Revenue, P600
8. P63,900
9. P80,300
10. P7,200
11. debit Rent Expense and credit Prepaid Rent, P10,500
12. P69,100
13. P5,000
14. P1,400
15. P18,690
16. P7,000
17. P70,000
18. P8,000
19. P5,000
20. P42,700
21. P135,000
22. P784,000
23. P25,000
24. P20,000
25. P450
26. P60,320
27. P290,000
28. P872.60
29. Debit supplies expense and credit supplies inventory, P156,000
30. P820
31. Dr. Doubtful accounts expense, 8,000; Cr. Allowance for doubtful accounts, 8,000
32. Debit interest expense and credit interest payable, P7,200
33. P255,000
34. P0
35. P18,000
36. Debit rent revenue and credit unearned rent revenue, P24,000
37. Debit interest receivable and credit interest income, P3,750
38. Debit supplies inventory and credit accounts payable, P8,700
39. P10,875
40. Debit prepaid insurance and credit insurance expense, P51,000
41. P24,000